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Since September 2009
Chase2327,
The only thing you can, currently, do is to sell your home via a short-sale. it avoides a foreclosure and the ugliness of a Bankruptcy.
A short sale is simple. The bank agrees to accept what the sale price of your home and will forgive the remaining mortgage balance. Please check with your Lender and/or Bank for details.
Also, please check with your tax advisor as to make sure that current tax code allows for the, "forgiven," portion of the loan not to be included in your income for tax purposes.
Good Luck!
Chase,
The "reduce the mortgage balance ans still let you stay in the house plan" is/was 1 of those "Hank Paulson/CNBC" ideas that will never happen. None of the options are easy if you are needing to sell it or can't make your payments.
Short sales are a possible remedy and is the latest "buzz" going around the RE world, but they are not easy. You are asking the bank to "eat your loss". It is a lot longer and more complicated than people think. You must prove you are broke... you must fall behind on your mortgage payments (usually) for them to consider. Your credit is still destroyed. Sometimes, the Lender will forgive and eat it and sometimes they want the woner to sign a promissory note for some of the remainder. I am sorry for your troubles, but if you are in this type of peril, get good legal advice to make sure you are doing the best thing in the long run for you and your family. It may be a better strategy if you are losing the home to attempt to save as much money and maneuver legally the longest without payments as you are already underwater. The answer is legal, not financial.
I wish you well.
Hi Chase,
I've been hearing your question more and more, and quite frankly, it really bothers me. I certainly understand your interest in reducing your principal balance; but in my opinion, your request is morally wrong.
Your mortgage company loaned you money, they did not agree to be an equity partner in your real estate investment. For many years consumers have been enjoying capital gains from an appreciating real estate market. I would be willing to bet that no one ever offered to pay extra to their mortgage company becuase their investment appreciated; so why should yours or any other mortgage company take a loss becuase your investment has decreased in value???
Steve, I couldn't agree more. Currently, society has gotten used to being "bailed out" of bad financial decisions. Heck...look at the Bear Sterns situation...so who can blame them. It is my opinion that if we allow bailouts, the individual homeowner will never learn a substantial financial lesson and we will be more likely to end up in this same predicament again as a country. As the old saying goes, "You made your bed, now you must sleep in it". I, as a taxpayer and borrower of money, do not want to pay for your bed linens.
Steve you hit it on the head. I didn't hear anyone complaing when they were selling their house for record amounts.
Don't keep raiding your HELOC. Make your monthly payments. Wait for the house to be worth more than you currently owe on your 1st mortgage, because eventually it will be again (Probably sooner rather than later). Don't join the growing legion of deadbeats that want the rest of us to bail them out.
As rockhopper said, stay on top of the payments and the market will come around, may take some time, but if you're not in an adjustable rate mortgage you should be in position to wait.
Pay down extra principal when you can, but make sure you are never late on the payment - it could harm your ability to refinance later on.
There are many in your situation, owing around the same amount or more than their house is worth.
Give me a call at 480-312-3222 AMSbank in Scottsdale...we have a program that might get you back to where you want to be...Michael
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chase2327
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is there any way that you can get your mortgage company to lower what you owe for your house without saleing and buying another? With current home sales in my area I am 50,000 to 100,000 in the hole with my house. Is there anything I can do?
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